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Negative Interest Rates and Precious Metals

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For many years; one of the standard lines of the Corporate media in its anti-precious metals propaganda was that “gold generates no income” (i.e. interest payments) in comparison to the dubious paper currencies of our “fiat currency” monetary system. Of course that feeble argument ignored the fact that (in the real world) our paper currencies were losing value at the rate of roughly 10% per year (the real rate of inflation), meaning that real interest rates on all Western paper were already deeply negative.

Then the corrupt central banks – led by the Federal Reserve — took nominal interest rates to zero. The Big Banks were (and are) allowed to “borrow” trillions in dollars/euros/pounds at 0% (prima facie fraudulent transactions), while savings rates went to near-zero. This meant that for the people; real interest rates across the West roughly equaled the full rate of inflation (i.e. -10% per year), meaning that the Big Banks were already confiscating our (paper) wealth at the rate of roughly 10% per year.

Even then, the equally corrupt Corporate media refused to endorse precious metals as the optimal vehicle for wealth-preservation. This is despite thousands of years of history which shows gold and silver never lose their “value” (i.e. the wealth they preserve), while a thousand years of history shows that paper currencies always lose their “value” (i.e. the wealth they preserve) via so-called “inflation”. Indeed, it is a documented, historical fact that in the 100 years the Federal Reserve has been “protecting the value” of the U.S. dollar that it has lost more than 98% of its value over that time.

The feeble excuse of the Corporate media for refusing to endorse history’s most-certain form of wealth preservation (gold and silver) was that, as a practical matter, there were “costs” associated with holding gold and silver as a physical asset – storage and/or insurance costs. Thus when nominal interest rates were still at 0%; these charlatans could still pretend that precious metals (and not the bankers’ paper currencies) was the asset class which ate into our wealth, ever so slightly.

Now, however, the corrupt central banks are taking interest rates into negative, nominal levels. When rates were at 0%; this was only an implicit act of economic rape by the central banks. The theft of our wealth was hidden, being the difference between the 0% (nominal) rate of interest on our savings, minus the level of real inflation – the “inflation” which our puppet governments pretend does not exist. Now, with nominal interest rates negative; the economic rape is overt, meaning the criminality of this wealth-confiscation by the Big Banks/central banks is now overt.

This is the open theft of any/all wealth in the form of paper savings, combined with the hidden theft which already existed via unreported/unacknowledged inflation. Now the corrupt Corporate media is denied even a pretext for refusing to endorse and advocate preserving our wealth in the secure, time-tested form of gold and silver.

With our paper wealth now being stolen in nominal terms (in addition to the unreported “inflation”), with precious metals currently priced (i.e. suppressed) to a trough which is below the cost of production for most producers, and with its 2,000+ year track-record for wealth preservation; there can be no rational objections of any kind to employing gold and silver as our primary vehicle for wealth preservation.



Source: http://bullionbullscanada.com/gold-commentary/26599-negative-interest-rates-and-precious-metals


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